How to Choose a Last Mile Carrier? [Step-by-Step]

In this post, we’re going to show you exactly how to choose a last mile carrier.

In fact:

These are the same strategies our clients use to partner with final mile carriers.

And deliver 10,000+ orders to their customers each month.

So if you want to:

• Get the best last mile carrier for the best price
• Quickly raise your last mile delivery capacity
• Provide more delivery options and grow at scale
• Turn more orders into successful deliveries

We’re going to show you how to do exactly that right now, step-by-step.

Let’s dive right in.

What is a last mile carrier?

A last mile carrier is a fleet of drivers and vehicles for hire that retailers use to provide last mile delivery services to their customers. Since their main role is order fulfillment, performance of carrier drivers determines the delivery experience, as they become the face of your business.

Types of last mile carriers

There are a lot of examples of last mile carriers on the market.

Many last mile carriers are also known as delivery service providers. These can be smaller regional shipping carriers or local courier companies, or large international carriers.

Best-known examples of last-mile delivery carriers include big names like FedEx, UPS, USPS, Royal Mail, and DHL.

Some companies are also third-party logistics (3PL) providers. This means that they can handle most or all of the logistics operations involved with running a supply chain (not just fulfillment via last mile carriers).

Read our full guide on 3PL and 4PL providers to find out what kind of services these companies can offer to your business.

Why using last mile carriers works

Why do last mile carriers work so well?

#1 With carriers, you bring your products closer to people

This is a big one. Why?

People love to shop online. A LOT.

The global online shopping market size hit nearly $4 trillion in 2020.

In the US alone, there will be 300 million online shoppers in 2023 - 91% of the population!

And with a dedicated last mile carrier, you have a way of selling your products to all of them.

That’s simply not the case with traditional manufacturing or brick-and-mortar stores.

In fact, 48.4% of retailers are using their physical stores as distribution centers.

And with the demand for last carriers on the rise, shipping zones are expected to increase up to 40% (according to McKinsey).

Which means a last mile carrier can bring you even closer to customers, in spite of the distance.

#2 Low entry barriers let you start delivering orders straight away

Using last mile carriers to deliver goods DOESN’T require capital investment.

With carriers, you only raise operational expenses.

You DON’T have to spend capital on buying vehicles, building a delivery fleet, or onboarding.

You can start selling your products and go to market as soon as you set up your web store.

This may set you back between $1.15 and $6.15 per parcel.

Still, that’s better than covering fuel, payroll, vehicle maintenance, and other transportation costs.

So for example:

Even with a last mile carrier, small businesses can provide free delivery to customers and remain competitive on the market.

#3 Carriers provide an UNLIMITED delivery capacity

Sure, last mile carriers have more reach than brick-and-mortar stores. But can this model handle large delivery volumes?

Yes!

In fact, last mile shipping continues to rise:

Source: McKinsey

Even if demand exceeds your capacity, orders that spill over will be accepted by another last mile carrier.

So you don’t have to rely on just one company. But you’re probably wondering:

What’s the best model for your business?

Well, that’s what the next part of the post is all about…

Which last mile carrier model is right for your business?

The first step when choosing a last mile carrier model that fits your business is to determine your delivery volumes.

Or, how many deliveries you handle in a specific period.

Let’s take your average number of deliveries per month:

Add up the total # of deliveries in a year, and divide it by 12 months.

That’s it.

Of course, this is a rough estimate.

Meeting seasonal demand in November and December will require a different approach than the slower season in July and August.

But this isn’t the only thing you have to consider.

So now, we’ll show you three different last mile carrier models.

Each with its own benefits and pitfalls according to your business.

Working with a single carrier

For most businesses, this is their main choice when looking for a last mile carrier provider.

Working with a single fleet carrier is relatively easy. It’s also more convenient in terms of:

• Tracking: you don’t have to monitor the performance of multiple drivers
• Communication: you typically have a dedicated person for your account
• Integrations: you connect your systems to a single channel
• Planning: you can quickly schedule pick-ups for delivery and in advance

You can also rely on small local last mile delivery service providers.

In many cases, this can lower your overall delivery costs. While working with local drivers ensures a positive delivery experience for your customers.

The downside of using a single carrier is that they often have a limited fleet capacity.

In high-demand seasons, carrier fleets have a harder time keeping up with order volumes.

With smaller last mile carriers, this is particularly true.

And if that’s the case, your customers will suffer the most. (And with them, your reputation)

Working with a 3PL

The biggest benefit of working with a 3PL (third-party logistics provider) is that you can have multiple fleets without managing the logistics by yourself.

This makes it easier to handle deliveries and meet expectations, regardless of your delivery volume or specific needs.

That’s why this last mile carrier model is ideal for dropshipping and similar hands-off models.

It’s also easier to customize commercial contracts with a 3PL. This may help you to:

• Lower delivery costs with options like flat-rate shipping
• Scale up or down the workforce (and delivery costs)
• While-label the delivery fleet to represent your brand
• Take advantage of otherwise unavailable technologies

Typically, this does mean that you won’t just hire the fleet and drivers.

You also cover the expenses associated with supporting services and staff, which does raise last mile delivery costs.

Plus, you lose a lot of control over the delivery process. And some 3PLs may not be able to accommodate all your needs in terms of speed and visibility.

Working with multiple carriers via tech platforms

Using multiple last mile carriers to handle deliveries gives your business:

• Flexibility: it’s easier to scale up or down fleet sizes depending on delivery volumes
• Unlimited capacity: you can hire as many carrier fleets as needed to fulfill all orders
• Better returns policies: you can handle both forward and reverse logistics
• Speed: you can dispatch deliveries to the best suited or closest carrier or driver
• Control: you prioritize what’s important to you: speed, shipping costs, green logistics
• Visibility: with a delivery platform, it’s easier to track progress and performance

But to achieve all of this, you do need a delivery management platform like eLogii.

These tech stacks have modules ideal for fleet dispatching and management.

This enables you to create virtual carrier fleets with individual driver profiles which makes it easier to plan and schedule deliveries, even in a dynamic environment or on the go.

You also have the benefit of using the delivery software with a crowdsourced delivery.

This allows you to build an agile fleet - a hybrid last mile carrier model where a main carrier handles most deliveries and several crowdsourced agents stay on stand-by, for the busier times of the day.

The only downside to using multiple carriers is that if you have never used delivery software, it may take you some time to get comfortable with it.

How to choose a last mile carrier: 8 things you need to consider

1. Last mile carrier tracking
2. Different service levels
3. Different last mile delivery options
4. Easy integration with delivery services
5. Delivery and shipping costs
6. Fleet, driver, and delivery capacity
7. Use of last mile delivery technology
8. Customer and delivery experience

Last mile carrier tracking

Tracking last mile carriers is crucial in three key areas:

• Progress monitoring
• Performance tracking
• Customer experience

That’s why last mile tracking can refer to:

Shipment tracking or order tracking gives you real-time visibility over the fulfillment process by tracking events in the delivery lifecycle. This helps you to gain insight over the progress over each delivery.

Sharing order tracking information with customers lets them check the delivery status of their orders and greatly improves their experience.

Last mile carrier tracking gives you visibility over each carrier fleet or individual drivers and their location in real-time.

This enables you to monitor performance to ensure efficiency, prevent late and failed deliveries.

Tracking data also helps you to schedule second and third delivery attempts or returns in real-time. Or analyze historical data to measure the performance of a carrier.

This feature is accepted by last mile carriers as one of the most requested features from service users.

For both B2C and B2B delivery, this means having the right last mile tracking technology in place.

This ensures the tracking information is accurate and reliable. And that all customers have a positive experience.

Different service levels

When picking a last mile carrier to work with, take notice of their services.

Every business has different last mile service requirements. The carrier you end up choosing has to reflect those needs by letting you pick and choose and customize their services.

In that way, they’ll provide exactly the services you’re looking for.

For example, a customized service level may let you configure multiple different delivery options that you want to offer to customers. Everything from same-day delivery to curbside delivery.

Different last mile delivery options

Let’s face it:

People want convenient, safe, and fast delivery.

In fact, convenience and delivery speed are among the most important elements of a five-star delivery experience for 80% of consumers. (According to delivery statistics)

So, beside traditional multi-day delivery options from storage facilities, you should also consider:

#1 Ship from store vs. ship from hub services: If you don’t have a warehouse, carriers have to support your ship-from-store model.

#2 Same-day + on-demand delivery options: If you want to provide fast and on-demand delivery to customers, you have to look for last mile carriers that can accommodate your needs. Or search for multiple carriers that can cover your entire service area.

#3 Point to point pick-ups or batching: You should look for last mile carriers that provide both. Picking up one order at a time is ideal if you want to fulfill same-day deliveries. Batching is a more budget-friendly option. Make sure that the carrier charges you a cumulative price, rather than per delivery.

Easy integration with delivery services

Delivery businesses rely more and more on technology.

The last mile carrier you choose has to work using technology that can integrate with your systems and tech stacks.

This means being able to accommodate on-premise integration. Or better use a powerful API to integrate with any system remotely.

Make sure the last mile carrier technology can integrate with your:

• Order management system
• Warehouse management solution
• Communication apps
• Customer service software

Additionally, ask whether they provide on-call support during the integration process.

Delivery and shipping costs

Lower delivery costs is always a HUGE factor when picking a last mile carrier. But it’s not the only factor to consider.

When discussing price with a carrier, compare the pricing on each delivery service you want to offer.

Standard delivery may be more affordable with one provider. But the same carrier may have the most expensive price for next-day shipping.

You should also see how you will be charged. Whether it’s a fixed monthly fee with a limited number of deliveries. Or an unlimited contract where you’ll be charged per delivery.

Fleet, driver, and delivery capacity

Determining the fleet capacity helps you know the order volumes a particular carrier can handle.

Besides the size of the fleet, check what kind of vehicles they use. There’s no point in hiring a carrier, if their vehicles break down and drivers miss deadlines or fail to fulfill orders.

The same goes for drivers. Make sure that the carrier has enough drivers on call to guarantee delivery on all orders.

Use of last mile delivery technology

Want to choose the right last mile carrier for your business?

Focus on technology. Why?

Last mile delivery technology helps you to tackle complex logistics and raise capacity to handle more deliveries and returns.

In fact, nearly every other company (or 46%) that uses technology has seen significant or moderate help getting large delivery volumes out to customers during the pandemic.

In other words, you can deliver more with technology. And you can do it easier.

Using software also raises efficiency and helps you to provide an amazing delivery experience.

Here’s how:

• You can integrate real-time quotes with the carrier and your online store
• You can’t raise efficiency, delivery speed, or capacity without capital investment
• You can use route optimization to raise stop density to lower the cost of delivery
• You can use real-time tracking to generate last mile visibility for you and your customers
• You can use software to collect, analyze, and evaluate data to track KPIs over time
• You can take advantage of innovative technology like AI and machine learning

So ask a potential last mile carrier what technology they use.

And make sure that it’s easy to integrate other software solutions.

That can help you to take your delivery service to the next level.

Customer and delivery experience

If you want to win more customers with your delivery, you have to focus on their experience.

Besides real-time carrier tracking, the carrier should also be able to offer your customers:

Delivery scheduling: 53% of online shoppers in the US won’t buy a product if they can’t pick and choose the delivery date. So when selecting a last mile carrier, make sure that they allow your customers to pick delivery slots with a date (and even time) of arrival.

Rescheduling: On average, 10% of all first delivery attempts fail worldwide. And 69% of consumers won’t shop again with a retailer if their orders don’t arrive on time. Carriers should account for this, and provide automated delivery rescheduling to improve customer experience and reduce your service costs.

Customer notifications: 59% of customers in the United States expect to receive delivery alerts, notifications, and ETAs about the status of their order. Make sure that the carrier can support this, and that you can customize these messages in line with your brand

SMS alerts: If the final mile carrier provides access to a delivery driver app to their fleet, make sure the drivers can use it to communicate with your customers.

White-labeling: Building brand awareness via delivery can help you market your services to potential customers and get your company noticed. The best carriers will let you white label notifications and provide branded tracking links with your company name, colors, and logo.

Customer reviews and ratings: A good last mile carrier isn’t afraid of allowing customers to give feedback and rate the delivery service and their experience.

Questions to ask when selecting a last mile carrier

If you’re ready to start evaluating 3PLs and last mile carriers, here are X questions you need to ask them before making your decision:

#1: What is the size of your delivery fleet?

#2: How many vehicles and delivery drivers do you have in service?

#3: What delivery area do you cover? Do you deliver locally or internationally, as well?

#4: How do you charge for delivery? Do you charge a fixed monthly fee or per delivery?

#5: Do you offer commercial contracts? What are the benefits?

#6: Do you provide different service levels and service customization?

#7: Can you accommodate multiple delivery options, like same-day or contactless delivery?

#8: How do you integrate delivery services? What does the process look like?

#9: What kind of tools do you use to manage delivery? Do you use delivery software?

#10: Can you integrate your tech stacks with other software? Do you provide support?

#11: Do you just provide order tracking? Or do you provide last mile carrier tracking, as well?

#12: Do you provide automated delivery scheduling and rescheduling?

#13: Do you provide notifications and SMS alerts? Can they be customized?

#14: Do you provide white-labeling?

#15: How do service users communicate with your staff? Do you have a dedicated channel?

#16: Do you ship from store? Or just from warehouses and fulfillment centers?

#17: Do you pick up per order? Or can you do delivery batching?

#18: What customers use your services? What do they say about you?

#19: What’s your track record in terms of on-time delivery and success rates?

#20: What is the first step I need to take to get started?

Ready to choose a last mile carrier?

Now you’re ready to evaluate your last mile carrier options.

And choose the right one based on YOUR business needs.

But if you need help with other areas of your delivery, we’re here to help.